How to navigate Bosnia and Herzegovina's tax system as an expat
Bosnia and Herzegovina's tax system explained for expats: income tax rates, VAT, special regimes, and filing requirements. Data table below has the numbers.
Bosnia and Herzegovina's tax system has some unique features that can work in your favour — or against you. Here's what to expect.
Tax System Overview
| Tax Component | Rate / Details |
|---|---|
| Tax System Type | Progressive |
| Top Personal Income Tax Rate | 10% |
| Effective Rate on €90,000 | 17.8% |
| Net Monthly on €90,000 Gross | €5,480 |
| VAT (Standard Rate) | 17.0% |
| Special Expat Regime | No special tax regime for expats |
| Tax Revenue (% of GDP) | 19.1% |
Income Tax in Bosnia and Herzegovina
Bosnia and Herzegovina operates a progressive income tax system, meaning higher earners pay a higher percentage on their income above certain thresholds. The top marginal rate is 10%.
What Does This Mean in Practice?
On a gross annual salary of €90,000, you would pay an effective tax rate of approximately 17.8%, resulting in a net monthly income of approximately €5,480. This accounts for income tax and mandatory social contributions.
For context, the average monthly salary in Bosnia and Herzegovina is approximately €914.
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VAT (Value Added Tax)
The standard VAT rate in Bosnia and Herzegovina is 17.0%. VAT is included in consumer prices and applies to most goods and services. Reduced rates typically apply to:
- Basic food items and groceries
- Medical supplies and pharmaceuticals
- Books and educational materials
- Public transport (in some cases)
Special Tax Regimes for Expats
No special tax regime for expats
While Bosnia and Herzegovina may not have a widely publicised expat tax regime, there may be bilateral tax treaties with your home country that prevent double taxation. Check if a Double Taxation Agreement (DTA) exists.
Tax Filing Requirements
As a tax resident of Bosnia and Herzegovina, you are generally required to:
- Register with tax authorities upon establishing residence
- Obtain a tax identification number
- File an annual tax return (deadlines vary)
- Declare worldwide income if you are a tax resident
- Report foreign bank accounts if applicable
Double Taxation
Bosnia and Herzegovina has double taxation agreements (DTAs) with numerous countries. These treaties determine which country has the right to tax specific types of income and help prevent you from being taxed twice on the same income. Before moving, check whether a DTA exists between Bosnia and Herzegovina and your home country.
Tax Tips for Expats
- Hire a local tax adviser familiar with expat situations during your first year
- Keep records of all income, deductions, and tax payments from day one
- Understand residency rules: most countries consider you a tax resident after 183 days
- Check for exit tax: some countries impose tax on unrealised gains when you leave
- Social security contributions are often separate from income tax and can add 10-20% to your total burden
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Get Your Free VerdictFrequently Asked Questions
Can I avoid double taxation when moving to Bosnia and Herzegovina?
Bosnia and Herzegovina has double taxation agreements (DTAs) with many countries. These treaties prevent you from paying tax on the same income twice. Check whether a DTA exists between Bosnia and Herzegovina and your home country, and which income types are covered.
Are crypto earnings taxed in Bosnia and Herzegovina?
Cryptocurrency taxation in Bosnia and Herzegovina varies. Most countries treat crypto gains as capital gains or income depending on frequency of trading. Mining and staking rewards are typically taxable. Regulatory frameworks are evolving, so consult a specialist tax adviser.
What deductions can expats claim in Bosnia and Herzegovina?
Common deductions in Bosnia and Herzegovina include pension contributions, health insurance premiums, mortgage interest (in some cases), charitable donations, and work-related expenses. Moving costs may also be deductible in some jurisdictions. A local tax adviser can maximise your deductions.
What happens to my pension contributions in Bosnia and Herzegovina?
If you leave Bosnia and Herzegovina, your pension rights depend on bilateral social security agreements. EU/EEA countries have portable pension rights. Outside the EU, check if an agreement exists with your home country. Private pension withdrawals may be taxable.
How does Bosnia and Herzegovina's tax compare to other countries?
With an effective rate of 17.8% on €90k income and a top rate of 10%, Bosnia and Herzegovina's tax burden is Moderate by European standards. The tax revenue as a share of GDP is 19.1%. Compare with other countries using our assessment tool.